SQM Research released its vacancy rates data for the month of March 2014 here, which showed national vacancy rates coming in from 2.1% to 2.0%, a moderate fall being considered normal for the time of year.
The main point of note in the month was the fall in Melbourne's vacancy rate to 2.1% (click chart)
I mentioned in passing the other day how during Sydney's last property boom through to 2003/4, vacancy rates as recorded by the REIA ran as high as 4.3%, and 5.3% in the outer suburbs, leading many to fear a crash.
Given that it was traditionally said that a "market in equilibrium" has a vacancy rate of 3.0%, the above chart goes some way to explaining why dwelling prices in Sydney will be higher next year than they were last year.
Not only is the city-wide vacancy rate at 1.5% very tight, certain key suburbs such as some in the inner west have vacancy rates as low as 0.6%-0.8%, which is essentially as low as you are ever going to see due in a frictional data set.
The ABS regional population growth figures reported this month showed that Sydney's population accelerated into a stunning growth of nearly 80,000 persons in the year to June 2013 (Greater Sydney was 81,000), easily enough to absorb the new dwelling stock (click chart).
Sydney's population growth is so high that the city urgently needs the increase in dwelling approvals to be converted into new dwellings in order to keep up.
Source: RP Data
Tomorrow, we'll take a look at the dwelling commencements data.
It slipped under the radar today since people were largely too busy concerning themselves with other data (from China mostly), but as I will demonstrate Australia's residential construction boom is now underway.
However, as I will also highlight, we're undergoing a significant structural shift - the new home building boom will be very heavily focused on attached dwellings and apartments, not houses.